§ Sir Terence Higgins (Worthing)
I am glad to have this opportunity to raise the subject of the Department of Transport's discretionary purchase of blighted homes, and to see my hon. Friend the Minister in his place. I know that he has taken an intense interest in this subject. Today's debate is an extension of the debate which took place on 15 May last year on, broadly speaking, the same subject. Therefore, I need to spend only a little time outlining the background.
The Minister and the House will know that I have been much concerned with the development of the A27 in the Worthing area. We have had a public inquiry that lasted almost a year, the report of which has now been tabled. I expect that the Department will publish the report in the near future.
The effect of blight is almost entirely on the Government's preferred route and has little effect, if any—a matter of half a dozen houses or fewer—on the bypass route. Which route is selected is obviously a great concern because the choice will affect enormously the degree of blight. I hope that, in his reply, my hon. Friend will tell us when he expects the inspector's report to be produced and when the Secretary of State expects to make a decision on it. There has already been great concern about the length of time that it has taken to reach a decision; uncertainty is one of the major problems that my constituents face in this matter.
In relation to the choice of route, I shall say nothing more than that I hope to present a petition that contains more than 15,000 signatures of people who favour the bypass route rather than the Government's preferred route, which would have a serious effect on the town. I have no doubt at all that the bypass is the right option, and I shall do all that I can to ensure that it, rather than the other route, is selected. Meanwhile, many houses have been blighted, some of which have been purchased on a discretionary basis by the Department of Transport.
My hon. Friend the Minister will know only too well that, some time ago, the Department of Transport lost a court case on this matter. The case is now quite famous. One of the conclusions was that the criteria the Government used in exercising their discretion were not right. Consequently, a review of the various guidelines took place, and that was still taking place when we had last year's debate. The guidelines have of course been published subsequently, and they give me grave cause for concern.
The essential point is that section 62(2) of the Planning and Compensation Act 1991 states that the highway authority mayacquire by agreement land the enjoyment of which will in their opinion be seriously affected by the carrying out of work or the useof the highway. Essentially, the criteria which are used in determining that are at issue. The Government recognise that the criteria that they originally used were wrong. The way in which they handled the matter was backed up by a number of ombudsman reports, which I mentioned in the previous debate and which the Department has recognised showed a deficiency in the process.
It is extremely important that those decisions are taken at ministerial level. They seriously affect the lives of people, and not only in relation to the road and the noise.
983 The decision must take into account, for example, medical conditions and the effect on job opportunities because people cannot move. Despite the assurances that I was given in the previous debate, I am concerned because my constituents have received letters from officials that say that they have decided one thing or another. This is a matter for ministerial discretion, and the responsibility should not be assumed by officials, even under the next steps agency arrangements, because they cannot take a sufficiently broad view.
The crucial point is that the Department is now prepared to include the decline of property values in the criteria it uses. It is absolutely clear that, if the value of property declines as a result of the building or proposed building of a road on a particular route—this may also be true in relation to railways—the fact that the value has declined shows that the enjoyment of the property is likely to be diminished. I should have thought that that was not open to serious dispute—the courts have taken the same view—but this is what has happened. Paragraph 7 of the guidelines states:We will not normally offer to buy your property unless we are of the opinion that it will be seriously affected by BOTH diminution in value AND noise arising during the construction period or during the first year following the opening of the road to traffic".It contains an exception for medical reasons.
There is nothing in the legislation that requires both criteria to be met. It is clear that, if the value has declined, that would be a necessary and sufficient condition for discretion to be exercised. I take the view that it is unreasonable—which is an important aspect of it—if the Department does not act in that way because the legislation says nothing whatever about also taking noise into account. In a sense, that is the crux of the matter. If one were merely to take the diminution in value into account, the discretion would have been exercised in a great many other cases. I shall return to this issue later.
I do not know whether it was as a result of this impending debate but, yesterday, I suddenly received no fewer than three responses from the Department about particular cases. My secretary, who is perhaps more cynical than I am, expressed some surprise at their timing. However, I must say that they have given me further cause for disquiet.
One response says that the individual cases are being reconsidered with all the evidence and thatI am able to inform you that, based on the current information, we have formed the opinion that your enjoyment of your property will be seriously affected by the severe aggravation of an existing medical condition by physical factors caused by the construction of the Worthing-Lancing improvement.However, these physical factors are not likely to arise for another two years when the construction of the scheme is expected to start".In effect, the Department is saying that it will defer consideration of whether to exercise discretion to buy until nine months before the start of construction. My hon. Friend the Minister is nodding in the affirmative.
People are suffering from medical conditions, it is accepted that their property has been seriously affected, and yet they are now being told that they can re-apply later and that the Department may or may not then exercise its discretion. That creates a degree of uncertainty for people who are suffering from serious medical 984 conditions, as the Department recognises, which is really quite intolerable. It is simply a device to improve the Treasury's cash flow, or it may, ultimately, not happen at all.
When individuals' lives are being seriously affected in this manner, such delay should not occur. Since I have not previously received many letters like those I have mentioned, I hope that my hon. Friend the Minister will carefully examine the issue. I do not think that one can procrastinate as the Department is now proposing.
I return to the question of diminishing value. The situation is developing in an interesting way. In many cases, my constituents have received replies that say that the Department recognises that the value of their property has diminished, but that the question of noise must also be taken into account. That is the Department's view, and it is not what is stated in the legislation. Some of the cases have been refused on the basis that the two criteria have not been met. I have had trouble having the diminishing value quantified but, fortunately, a couple of months ago, I received a letter which was sent to my constituent that recognised a reduction in value and quantified it. It said:We have carefully considered the valuation evidence submitted by the Agency's Valuer and have concluded that the diminution in value due solely to the road scheme is 16.7 per cent.The letter then lists the unaffected market value as £150,000, the current market value as £125,000 and the reduction in value as £25,000.
Despite that, the Highways Agency is not proposing to purchase the property, even though my constituent has clearly suffered a loss of £25,000 as a result of the Government's road scheme. The application is being turned down on the grounds that noise must also be taken into account. That is not right, and bears out what I said previously. The building of roads and infrastructure—it is also true for railways—is, effectively, highway robbery. Roads are being built at the expense of people who happen to have the bad luck to be in the wrong place at the wrong time. The cost should be borne by the community as a whole. People should be compensated or their property purchased to avoid suffering, which is no fault of their own, as a result of a Government decision over which they had no control.
I do not doubt that, over the Minister's head, is the shadow of a Treasury Minister. Although my own halo is a little out of date, it is still there, and I do not doubt that the sums involved are substantial. Across the country, we are probably talking about hundreds of millions—perhaps billions—of pounds and I can understand why my right hon. and learned Friend the Chancellor of the Exchequer would be concerned about it. All that that sum reflects is the extent to which individuals are suffering as a result of present policy. I therefore argue strongly that we ought to change the policy and that at least one of the necessary and sufficient criteria ought to be reduction in value.
Another point, which I made in the previous debate, is that we are talking about gross cost to the Exchequer. Once the road has been built, the properties purchased by the Department can be re-sold. Although they will be worth less, they will certainly not be valueless. It is important to consider the long-term net cost rather than the gross cost.
Although I have described an important point of principle that affects not only my constituency but many parts of the country, I hope that the solution to it will be 985 simple. I hope that, in the light of the inspector's report, the Government will come down in favour of the bypass and at most have to purchase only about half a dozen houses. They could re-sell the houses that they previously bought and the area presently blighted could be reinstated. Much of the problem has arisen because the houses that have been bought—I am glad that they have been bought—have been occupied by unsuitable tenants, causing the whole area to fall in value and creating additional problems.
My hon. Friend the Minister is not unsympathetic to my view. I very much hope that rapid decisions on the cases will be made, especially the medical cases, because the uncertainty that I described cannot continue. A serious interdepartmental review of broad, longer-term policy is needed—perhaps considering the experience in France where one simply pays over the odds and far fewer problems of planning blight result. I hope that such a review would produce a sensible and just result, unlike what we have at the moment.
§ The Parliamentary Under-Secretary of State for Transport (Mr. Steve Norris)
I am grateful to my right hon. Friend the Member for Worthing (Sir T. Higgins) for raising the issue and for giving us a further opportunity to debate a subject, which, as he said, he raised on 17 May. I should like to express my personal appreciation of my right hon. Friend who, sadly, is due to retire at the end of this Parliament. I note that my hon. Friend the Member for Eltham (Mr. Bottomley), who no doubt has an interest in these matters, is in his place. My right hon. Friend has been a distinguished Member for a number of years and has shown his customary assiduity, application and interest in the affairs of his constituents as vigorously as ever on this important issue. I pay genuine tribute to him. I hope that he will allow me to deal in very specific and rather legalistic terms with a number of the issues that he has raised.
Since the previous debate, there has been a review of the trunk road programme in England, as a result of which 77 schemes, of which the environmental impact was no longer considered to be acceptable in relation to the benefits, were removed from the programme. In those schemes, the route protection is being withdrawn and owners of property on or near the routes will no longer be affected by the prospect of road improvements.
Other important bypass and relief road proposals remain in the programme, including the proposal to improve the A27 between Worthing and Lancing. As my right hon. Friend said, the scheme has a long history, which I shall not go into again. The review of the programme confirmed its importance as a much-needed improvement to the only east-west trunk road route south of the M25.
Following consultation on four route options, a public inquiry, to which my right hon. Friend referred, ended, as he knows, on 24 August 1994. I can inform him that the inspector's report following that inquiry has been received by my right hon. Friends the Secretaries of State for the Environment and for Transport. It is inevitably a lengthy document. We will give it very careful consideration and make an announcement as soon as possible.
I know that my right hon. Friend will appreciate that I cannot comment on any of the issues involved in the report, whether they relate to the route or to the 986 desirability of one or other option, while my right hon. Friend the Secretary of State for Transport is taking a quasi-judicial decision on the matter. Nor of course can I make any prediction about the outcome. I note my right hon. Friend's concern that, whatever the outcome, there should be an early decision and I shall of course draw that to the attention of the officials involved in considering the report.
§ Mr. Norris
I will have to write to my right hon. Friend about the report's content and the timing of its publication. I have no reason to believe that the report will eventually be treated in anything other than the normal way. Subject to whatever view my right hon. Friends the Secretaries of State for the Environment and for Transport may take of the report, it will find its way into the public domain.
The announcement that I made on 19 July of new guidelines for use by the Highways Agency in considering applications for discretionary purchase of property seriously affected by trunk road schemes require, as my right hon. Friend said, the Court of Appeal judgment in what is now known as the Owen case of 30 June 1994 to be taken into account. The guidelines require the agency to consider diminution in value of a property as well as the predicted effects of noise and other physical factors when forming an opinion, as is required by the relevant legislation on whether enjoyment of the property will be affected by the construction or use of the road.
It is important to remind ourselves of the purpose of the discretionary purchase scheme. It is not the only opportunity for an individual to sell an affected property. The discretionary purchase scheme enables the Department to act as a buyer of last resort where the enjoyment of a property is or will be seriously affected by trunk road proposals, where the owner has a pressing need to move that is not connected to the road scheme and where hardship can result if the property cannot be sold except at a heavily discounted price.
Under the new guidelines, I shall also consider cases where the owner or another person who normally resides at the property has a medical condition that would be severely aggravated by the physical effects of construction work or use of the new road. My right hon. Friend referred to those three conditions, about which I wrote to him just the other day.
I must make it clear that the point of our treatment of medical conditions as my right hon. Friend described is that the effect of the scheme on the medical condition of the individuals concerned will not manifest itself until work starts. I hope that it is not inappropriate for me to endorse the comment made by my right hon. Friend, a former distinguished Treasury Minister himself, that that does indeed help Treasury cash flow. It would be an inappropriate use of public funds to acquire properties many years—in this case two years—before the likelihood of work commencing, where the rationale for a purchase under discretionary purchase rules is medical effect. That is why, in cases relating to medical condition, an offer to purchase is deferred, or owners are invited to reapply nearer the appropriate time.
I noted that my right hon. Friend said that that does—I shall not say might—cause further uncertainty in the minds of those who have been asked to re-apply. I shall 987 certainly reflect on that. I can confirm that it is not the purpose of the new guidelines to add to the perfectly understandable concern in such a situation; rather it is to recognise that, where the key to the request to purchase is a medical condition related to the onset of the scheme, the actual purchase should be broadly proximate to the start of works on the scheme.
The House may also be interested to know that, when revising the guidelines which are used for discretionary purchase in advance of construction work and which relate to the powers of section 246(2A) of the Highways Act 1980, we also considered the criteria for discretionary purchase during the course of construction or immediately after the new road is opened relating to other parts of section 246. Those criteria were relaxed and made more consistent with the guidelines applicable for discretionary purchase in advance of works and a number of owners whose properties are seriously affected by construction work or a newly opened road have benefited.
My hon. Friend the Minister for Railways and Roads promised in the debate on 17 May that all applications made for discretionary purchase under the relevant powers and rejected since the 1994 Court of Appeal judgment in the Owen case would be reconsidered. The majority of those cases have now been reconsidered under the new guidelines and owners informed of the result. Owners were given an opportunity to submit any relevant new information in support of their applications and new assessments have been made of predicted noise levels and physical effects. Information from professional valuers on diminution of value caused by scheme proposals has been obtained.
All that information has been taken into account in reaching new decisions on cases in accordance with the new guidelines. That has involved a great deal of work by the Highways Agency. I have, as my right hon. Friend was generous enough to say, taken a close personal interest in the many cases where the decision reached was borderline and where my right hon. Friend or other hon. Members may have made specific representations on behalf of their constituents.
I acknowledge the fact that, as my right hon. Friend said, some of the determinations will have been made by officials. That is where, ostensibly at least, the cases are not borderline and are relatively straightforward to determine, but I reiterate my outstanding offer that if I am asked to look again at any such decision by an hon. Member on behalf of a constituent, I shall most certainly undertake to do so. I appreciate that the thrust of my right hon. Friend's remarks is that these are important matters for people who are affected on whichever side of the guidelines they may eventually fall.
I should say that other owners, whose applications for discretionary purchase were rejected before June 1994, have also been given an opportunity, through advertisements in local newspapers, to apply to make fresh applications for consideration under the new guidelines. More than 50 cases are still being reconsidered and they will be dealt with as quickly as possible.
In connection with the A27 scheme, 48 applications have been considered or reconsidered under the new guidelines. In six cases, an offer to purchase has been made with immediate effect. A further five cases, in 988 which owners or occupiers have a medical condition, have been accepted in principle under the provisions of the guidelines for purchase at a later date to which I have just referred. Thirty applications have been rejected and seven are still under consideration.
The properties that the agency has agreed, or provisionally agreed, to buy under the new guidelines add to the total of more than 120 properties on which offers to buy had already been made in connection with the A27 scheme. None of those properties would be required for the proposed route of the scheme. It is our policy to seek to limit the effects on the character of a locality affected by trunk road proposals which may be caused by widespread advance purchase of property. It is with that aim in mind that, in the new guidelines, we intend to target offers to purchase on those properties which are seriously affected by physical factors, including noise and diminution in value.
The Highways Agency will, as my right hon. Friend suggests, also seek to return as many properties as possible that have been purchased under the discretionary powers to private ownership at the earliest possible opportunity. However, necessarily, the resale of property must avoid destabilising the market in the locality.
§ Sir Terence Higgins
I understand that, but my hon. Friend has not answered the fundamental point, which is that the reduction in value in itself is sufficient to reflect a serious reduction in the enjoyment of the property. That brings out clearly the need for the guidelines to be further revised. If anything, the change tightens the criteria.
§ Mr. Norris
I am aware that some owners have been disappointed that their applications have not been successful and feel that the guidelines should have been drawn more generously to allow the Highways Agency to purchase an even greater number of properties, but with regard to my right hon. Friend's example of a constituent whom he claims has lost £25,000—if I quote him correctly—and whom he describes as having been the victim of highway robbery, I remind him that the powers under the Highways Act 1980, which allow discretion to purchase properties of which enjoyment will be seriously affected are in addition to, not a substitute for, the provisions of the Land Compensation Act 1973, which clearly give owners the right to claim compensation for loss in value one year after a road has opened.
There is no obligation on the Highways Agency to acquire property which is not required for a scheme, and the use of guidelines to ensure that cases are considered in a fair and consistent manner has been established since 1992. The important point is that those discretionary powers are to be applied in cases where the person concerned has no foreknowledge of the effect of the scheme; where the person concerned or a person residing in the relevant property can show serious effect in terms of their enjoyment of the property, as defined, and as qualified as my right hon. Friend said, by the judgment in the Owen case; and where the individual concerned has a pressing need to have the property acquired in advance of the compensation available under part I of the 1973 Act, which inevitably will be paid to any person who can show the loss that I have outlined a year after the scheme has opened. Discretionary purchase is not a substitute for the part I compensation, it simply provides for those exceptional circumstances.
989 I acknowledge that my right hon. Friend is understandably concerned at the effect of the application of the new guidelines, but I stress that there is no sense in which they affect part I of the Land Compensation Act 1973, which remains the bulwark on which those who may be refused compensation in these cases can none the less rely if they continue to experience deterioration in the value of their property a year after the scheme has opened. It is that series of criteria taken together that it is important to bear in mind in these cases.
The new guidelines comply in full with the judgment given in the Court of Appeal in 1994. In the case of Owen, a further judicial review in November 1995 confirmed that the Secretary of State had not acted perversely or 990 irrationally in reaching the decision to reject Colonel Owen's application in accordance with the guidelines and Colonel Owen was refused leave to appeal that judgment on 12 February.
We will continue to consider applications in accordance with the two-stage process set out in the guidelines. Our intention remains to provide relief to owners whose enjoyment is seriously affected and who have a pressing need to sell in advance of entitlement to claim their statutory compensation.
§ It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
§ Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.